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CME Group Boosts Dividend 59%; Adjusted Net Misses View (CME)

2/2/2012 8:51:00 AM
Referenced Stocks:CME

Futures exchange operator CME Group Inc. ( CME ) on Thursday posted adjusted fourth quarter earnings that missed expectations, but also announced a big change to its dividend policy.

The Chicago-based company reported fourth quarter net income of $745.9 million, or $11.25 per share, compared with $196.2 million, or $2.93 per share, in the year-ago period. Excluding a big one-time tax gain, adjusted profit was $3.55 per share.

On average, Wall Street analysts expected a higher profit of $3.64 per share.

In a separate announcement, CME's board of directors said the company would now look to pay out 50% of the previous year's cash earnings. It had previously paid out 35% of its earnings in dividends. As a result, CME boosted its first quarter dividend payout by 59% to $2.23 per share.A

Additionally, the company will pay out a variable special dividend each year. For 2012, this one-time payout will be $3 per share.

CME Group shares rose $2.92, or +1.2%, in premarket trading Thursday.

The Bottom Line
Shares of CME Group ( CME ) will now have a 3.63% dividend yield, based on the higher dividend payout and last night's closing stock price of $245.48. The stock has technical support in the $226-$230 price area. If the shares can firm up, we see overhead resistance around the $253-$260 price levels.

CME Group Inc. ( CME ) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .